NY C Corporation received a Delaware 1065 K-1. The C corp is not registered in Delaware

[DTNY07]

NY C Corporation received a Delaware 1065 K-1. The C corp is not registered in Delaware

The K-1 was at a loss.  

I know they would have to pay the Delaware annual tax.  Which was due 3/1/24, so there would be penalties.

But, the fact that they weren't registered in Delaware is more what concerns me.

The partnership that issued the K-1 = there isn't any physical offices or employees in Delaware

It is a venture capital fund.   

The C corp is based in NY.  No dealings in Delaware other than the K-1 received

I do think they should register as a foreign corporation in Delaware going forward.

But for 2023, should i just file the corporate return and do a Delaware return also without them being registered in Delaware?

I have done that (not in purpose) in the past for other states.  meaning they failed to give a state K-1, so I didn't realize something was needed in another state.  Wasn't until they received a notice later on about the other state K-1

Thanks, in advance for any help

[Terry53029]

Sounds like your NY Corp just has an investment in a Delaware partnership and would be exempt from any tax in Delaware. From Delaware code title 30: link, https://delcode.delaware.gov/title30/c019/index.html

I am not well versed in state of Delaware Corp tax, and you should do more research.

(8) Corporations whose activities within this State are confined to the maintenance and management of their intangible investments or of the intangible investments of corporations or statutory trusts or business trusts registered as investment companies under the Investment Company Act of 1940, as amended (15 U.S.C. 80a-1 et seq.) and the collection and distribution of the income from such investments or from tangible property physically located outside this State. For purposes of this paragraph (b)(8), “intangible investments” shall include, without limitation, investments in stocks, bonds, notes and other debt obligations (including debt obligations of affiliated corporations), patents, patent applications, trademarks, trade names and similar types of intangible assets;